As climate change becomes imminent with wildfires, hurricanes, and other extreme weather conditions resulting in significant social and economic consequences, there’s a societal imperative to harness reliable and sustainable power in a scalable and affordable way. One estimate projected the 2020 California wildfires alone will cause more than $20 billion in damages, and leave tens of thousands of residents without power.
Scaling solutions to advance the energy transition from fossil fuels to reliable, decarbonized energy solutions benefits from the knowledge of global professionals and the expertise of local partners. Local know-how is crucial for understanding the unique energy challenges and financing constraints communities face around the world.
Siemens Financial Services (SFS) is playing a key role in this energy transition by investing in local companies to create ecosystems – networks of experienced companies, investors and technological experts that lay the foundation for a low-emission, high-resilience future.
By investing in partnerships that advance 'energy-as-a-service' business models, SFS creates strong ecosystems that benefit from multi-company technical and financing expertise.Steffen Grosse, Global CEO, Equity, Siemens Financial Services
According to McKinsey, sustainable energy solutions are becoming more abundant and affordable, which makes Energy-as-a-service (EaaS) solutions an attractive proposition. EaaS, the energy-focused subset of XaaS, gives customers – from commercial and industrial (C&I) clients to municipalities, universities, schools, and hospitals – access to environmentally-friendly, independent, reliable, on-site energy solutions with zero upfront capital and predictable energy costs. EaaS allows customers to focus their scarce resources and capital on their core business.
According to GreenBiz, research shows EaaS solutions are also maturing and becoming more widely available at any size. EaaS technologies vary and may include solar, battery storage, hybrid systems, microgrids, combined heat and power, centralized heating and cooling, infrastructure upgrades and electric vehicle charging infrastructure.
A trailblazing example, SFS invested in a Brazil-based platform, Micropower Energy (MPE; formerly Micropower-Comerc), to deliver battery storage to C&I clients. MPE has helped introduce Brazil to the Battery-storage-as-a-service model (bSaaS), which provides cleaner, more reliable power at a lower cost to the Brazilian C&I market. With the recent investment in distributed solar platform Brasol, SFS further anchored its commitment to leveraging its investment expertise and capital resources to help shape Brazil’s energy transition to a more distributed energy network. The connection of different platforms creates a useful ecosystem and offering to C&I customers.
SFS, alongside Siemens Smart Infrastructure, also recently entered into an investment agreement with Berkeley Energy Commercial Industrial Solutions (BECIS) in the Asia Pacific region. Headquartered in Singapore, BECIS provides distributed energy solutions to C&I customers globally with a substantive footprint in Asia. It currently operates a large portfolio of distributed energy solutions assets across countries such as India, Indonesia, and Thailand. This investment collaboration helps to accelerate deployment of distributed energy in Asia Pacific by providing a variety of technologies, such as solar energy and battery storage through a flexible EaaS model.
Both the commercial and municipal transportation sectors also benefit from EaaS solutions. A switch from fossil fuels to electricity to power vehicles can reduce carbon emissions and improve air quality. To help drive this forward, SFS made an equity investment in Amply Power in the United States – a company that helps commercial fleet operators switch from diesel-powered vehicles to electric-powered vehicles. Amply offers a holistic Charging-as-a-Service (CaaS) solution helping operators keep their fleet powered at the lowest cost with flexible pricing tailored to meet customers’ needs. Fleet operators benefit from a simplified turn-key solution, which significantly reduces the cost and challenges involved with electric vehicle transition.
Also, in the United States, SFS and Siemens Smart Infrastructure recently announced the formation of a new joint venture, Calibrant Energy, with Macquarie’s Green Investment Group. Calibrant bundles the latest distributed energy technologies and financing expertise of two global leaders along with technical expertise of Siemens. This joint venture creates EaaS solutions to simplify the transition toward energy decarbonization for corporations and institutions by planning, designing, building, owning and operating clients’ energy production and storage assets.
As an experienced investor in energy and infrastructure initiatives in the Americas, SFS has been a pioneer in providing flexible financing solutions for EaaS and distributed energy projects.Anthony Casciano, CEO, Siemens Financial Services Americas
Many markets around the world cope with underinvestment in critical infrastructure because of funding limitations. One way that SFS enables EaaS solutions is through revolving credit facilities that fund the construction of these projects at competitive rates.
By providing construction financing, SFS has enabled new battery storage projects from New Jersey to California. Such projects are critical to ensure grid stability as renewable energy replaces fossil fuel plants.
How can large, global companies help advance the energy transition, through EaaS solutions, in local communities around the world?
Innovative technology, market intelligence, investment expertise, construction and long-term debt financing solutions, and – possibly most importantly – the know-how from local experts can help address energy infrastructure challenges, while aiding the transition to scalable, cost-efficient, sustainable, and independent energy systems.
By Steffen Grosse, Global CEO, Equity, Siemens Financial Services and Anthony Casciano, CEO, Siemens Financial Services Americas